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How Many Jobs Will Defense Lose?

The Aerospace Industries Association (AIA), Aviation Week magazine as well as some other institute and companies released their annual report on aersopace related workforce. The prediction is that the industry could shed up to four and a half percent of their workers during 2009. This would amount to about thirty thousand positions.

The report did find that there were substantial job openings within the industry but this number was about twenty-seven percent less then last year. There are also concerns that this trend would continue with the demand for engineers especially to be down. The industry does face a possible large number of retirees as well in the next decade.

During the massive downturn in defense spending in the Nineties up to forty percent of jobs were eliminated. Many of this was due to the merger and acquisition activity that occurred in that decade which eliminated a great deal of overhead and duplicate jobs. Because the general economy grew at the same time those jobs were absorbed but there were many localities had hit by the losses.

This is proving to be true of the current restructuring of the industry. The manufacturing jobs especially related to programs like MRAP, aircraft and engines tends to be located in only a few towns and cities. If these programs end even if the money involved is sent to another program it will hit that area hard. Owego, NY is the biggest example right now with the end of the VH-71. Colorado and California have also taken a hit with the decision of Lockheed Martin to restructure their Space Systems Division. Eight hundred jobs will be eliminated with those areas seeing them gone or moved to other sites.

If there are big reductions to the NASA and Defense budgets some cities could be affected greatly. These are places like Huntsville, AL or New Orleans, LA and Houston, TX where facilities support development and production of the Ares system possibly facing cancellation. In Massachusetts BAE Systems is laying off two hundred or more workers due to the standard "changes in defense priorities" explanation.

The loss of the VH-71 Presidential transport helicopter continues to have fall out beyond Lockheed's main facility at Owego, NY. Both Bell Helicopter and Augusta Westland who worked on the program as well have laid off people in Maryland and the Washington, DC area. These were supporting the integration and testing part of the program and now there is no requirement for this work. About two hundred people lost their jobs.

If there continue to be a major restricting of these kind of programs without the start of new ones there may be significant job losses. These could be well above thirty thousand. There are also concerns with the civil aerospace industry. Companies who perform SETA type work are also facing issues as the Obama Administration plans to convert a great deal of those positions to government work. While there won't necessarily be job losses as a new one is created those companies will lose revenue and earnings. Overall the industry is facing a rather poor few years.


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